Credit Card Interest Rate Cap: What It Could Mean for Your Debt

President Donald J. Trump recently sent shockwaves through America’s banking industry when he called for a 10% credit card interest rate cap. On Jan. 9, 2026, the president posted on social media calling for a one-year credit card interest rate cap of 10%, starting on Jan. 20. His social media message also expressed concerns about affordability and said that Americans were being “ripped off” by credit card companies charging high interest rates. 

Other than the social media post and some early conversations with Congress, it’s unlikely that President Trump will be able to cap credit card interest rates. Congress hasn’t passed any laws to require it and doesn't seem likely to do so. 

Even if there were more traction, a 10% APR cap might not be the boon to consumers it's touted to be. Let’s look at what a credit card interest rate cap might really mean, why it's unlikely to happen, and how you can manage your debt (or think about getting debt relief) in the meantime. 

A 10% Credit Card Interest Rate Cap Could Help the Most If It Applies to Existing Debt 

As of November 2025, the average credit card rate was 20.97%, according to Federal Reserve data. A 10% credit card interest rate cap that applied to existing debt would halve the average rate. According to one economist, a 10% credit card interest rate cap would save Americans about $100 billion per year in interest fees. 

How much could a credit card interest rate cap save you on your existing debt? Experian data shows that as of June 2025, the average credit card balance was $6,735. Let’s look at how long it would take to pay off that average amount of credit card debt. We’ll assume $200 monthly payments and compare the average credit card APR and a 10% credit card interest rate. 

For the average credit card debt balance, a 10% credit card interest rate cap would save you one year of debt payoff time and more than $2,000. That’s the power of getting a lower rate on your personal debts. You can pay off debt faster. 

There are a few problems, though. For one thing, a new interest rate cap would be unlikely to apply to existing debt. More likely, it would only apply to future debt. Of course, it has to be made law to apply to anything—and a few big challenges will probably stop this plan in its tracks. 

The President Can’t Set Interest Rates on His Own 

The first big challenge with President Trump’s plan is that the president doesn’t have the power to suddenly just decide to change interest rates. It's completely ineffective for a president to try and declare a new credit card interest rate cap using social media. 

In fact, there are no federal laws to require general credit card interest rate caps. Maximum rates on credit cards are usually set by state laws in the state where the credit card company has its headquarters, not at the federal level. 

The only credit card interest rate caps offered by federal law are for military servicemembers. For example, the Servicemembers Civil Relief Act (SCRA) has a credit card interest rate cap of 6%, but only for eligible active duty military personnel. 

If the federal government wanted to reduce credit card interest rates for everyone, they would have to work with Congress and pass a new federal law. Some Democrats and Republicans in the House and Senate have expressed support for new laws to require a credit card interest rate cap. Banks and financial institutions are fighting against these efforts.  

Banks Don’t Want a Credit Card Interest Rate Cap 

Several banking leaders and financial industry groups have already come out to say they aren’t in favor of the president’s 10% rate cap. Jamie Dimon, CEO of JPMorgan Chase, said a 10% credit card interest rate cap would cause “economic disaster” by forcing banks to offer less credit to customers. In turn, credit card customers would likely cut back on their spending.  

A 10% APR rate cap would cause nearly all current credit card customers to lose access to credit, according to research from the Electronic Payments Coalition. The group’s study claimed that nearly every American with credit scores below 740 would have their credit card account closed or see their credit limits severely reduced. 

America’s Credit Unions, an industry trade association, also came out against the credit card rate cap idea, saying it would hurt consumers by reducing access to credit. The group estimated that 47 million Americans with subprime credit scores would no longer be able to obtain or keep a credit card account in the event of a 10% credit card rate cap.

Credit Card Interest Rate Caps Could Hurt Consumers (and the Economy) 

On the one hand, it’s easy to be skeptical about what banks and financial institutions say. They surely don’t want to lose a profitable part of their business. But if Americans want easy access to consumer credit, credit card companies need to be able to cover their costs and manage their risks. And this includes charging higher interest rates to less creditworthy borrowers. 

If all credit cards were forced to reduce their APRs to 10%, many banks might just close people’s credit accounts instead of losing money on lower-interest loans. The domino effect could look something like this. 

If less credit is available to consumers, people will cut spending. Then, less money is being spent throughout the economy, which could mean: 

• Less spending at local businesses

• Fewer jobs

• Economic slowdown

Losing access to credit cards could also force people with lower credit scores to rely on riskier, predatory lending like payday loans or car title loans. These types of personal debt tend to charge even higher interest and fees than the highest APR credit cards.

No Credit Card Interest Rate Cap? Here’s What You Should Do 

It seems unlikely that President Trump will succeed in capping credit card interest at 10%. Some major banks are reportedly working on new credit card products with a special 10% APR. Soon after Trump’s January social media post, one company released a new credit card that offers an introductory 10% APR for the first 12 months. 

None of these new credit cards would lower the interest rate on anyone’s existing credit card debt. If you have credit card debt, it’s probably best to assume that you’ll continue with the same credit card rate you have now. Consider strategies to manage the debts you have with the APRs you already have:

• Choose a debt payoff strategy like the debt snowball or debt avalanche

• Make a budget plan 

• Cut your spending 

• Boost your income if possible

And if you’re having trouble managing your debt, you might want to think about debt relief. Getting professional debt relief help could enable you to get rid of debt faster than making minimums, without waiting for a credit card interest rate cap.